U.S. car makers try to repeat green halo of Prius
DETROIT (Reuters) - When Tom Weatherbee swapped his minivan for a Toyota Prius hybrid two years ago, he was mostly hoping to save money at the gas pump.
But he was pleasantly surprised by both the requests from friends for a test drive and the grins its aerodynamic profile drew at the grocery store, and he basked in the attention.
"Even the people who own more expensive cars acknowledge the Prius as being pretty cool," said Weatherbee, 51, an electrical engineer who lives outside Traverse City, Michigan.
That, in a nutshell, is the challenge for Toyota Motor Co as it looks to build on the success of the Prius, the leading hybrid vehicle in the United states, and for rivals such as Honda Motor Co and General Motors Corp, which are seeking a share of the projected boom in greener cars.
Even with U.S. gas prices over $3 a gallon, up 50 percent in three years, marketing experts say U.S. buyers want hybrids that not only reduce fuel consumption and emissions but also make a statement about the driver's commitment to the environment.
The result is one of the biggest challenges to the U.S. auto industry since Detroit figured out how to market the hulking, gas-guzzling sport utility vehicles that dominated the market in the 1990s.
Toyota's Prius, with a list price of $21,100 and fuel consumption of 45 miles per gallon, commanded 51 percent of the U.S. hybrid market in 2007. Now the No. 1 Japanese automaker is considering extending the Prius line-up -- effectively making it a brand on its own.
GM, meanwhile, is focusing on its all-electric Chevrolet Volt in a bid to create its own "halo" car. Although GM will not sell the Volt until at least 2010, it has already started featuring it in TV ads.
GM invited over 200 Volt enthusiasts from all over the United States to the New York auto show to meet with designers and developers, building further buzz among a group of devotees who call themselves the "Volt Nation."
Honda, which beat Toyota to the U.S. market with the Insight hybrid in 1999 but withdrew it in 2006, is planning a more economical hybrid for 2009 that takes aim at the Prius. Honda's Civic hybrid, at $22,600 and with the same fuel consumption as the Prius, is the No. 2 hybrid but was outsold by the Toyota vehicle by more a more than 5-to-1 margin in 2007.
Hybrids, which shift between a battery and a combustion engine to boost fuel economy, made up just 3 percent of U.S. sales in 2007. But growth was 40 percent from the previous year, and there is plenty of room for that to continue, given that they account for just 0.3 percent of registered vehicles. Gas-thirsty SUVs, by contrast, account for more than 14 percent of vehicles on the road.
BUYERS ARE LIARS
Jon Osborn, research director at consulting and research firm J.D. Power & Associates, said automakers must tailor their message to a small but emerging market.
"Only about 6 percent of the U.S. population buys a new car each year," Osborn said. "It's not quite a needle in a haystack, but it's a small target to shoot for."
One complication for car makers has been inaccurate market research. In research groups, car buyers have said they would consider buying a car that looked just like established models, with just a badge on the back to identify it as a hybrid. Continued...
